Millennium Knickerbocker Hotel v IWCC

Synopsis: The appellate court reiterated that Section 19(g) of the Act governs enforcement proceedings and expressly provides the proper venue for such actions is the circuit court.

Facts: The parties executed a lump sum settlement contract which was approved by the Commission. On the face of the contract, the respondent marked it had paid all the petitioner’s medical bills and left blank the space where unpaid bills are to be listed. The “Terms of Settlement” memorialized the matter was settled on a disputed basis and “Respondent is hereby released, acquitted, and discharged from any and all liability under the *** Act *** including medical and hospital expenses incurred or to be incurred, known or unknown.” Approximately two and a half years after the contract was approved, the petitioner filed a “Motion to Enforce Contract and Penalties” with the Commission. The petitioner’s motion noted he received medical bills that were still unpaid and the respondent “has refused to honor the [settlement] contract and pay the outstanding medical bills”; the petitioner requested an order directing the respondent to pay “any and all medical bills that are pending” and an award of penalties and fees. However, at the start of the hearing before the Commission, the petitioner’s attorney stated he was not seeking penalties, only the payment of a single bill.

The Commission found the plain language of the contract indicated the respondent was liable for the outstanding medical bills and ordered it to pay $16,618.88 in medical expenses. The Commission further found the refusal to pay was unreasonable and vexatious and awarded approximately $12,000 in penalties and fees. On appeal, the respondent argued the Commission lacked jurisdiction to consider the petitioner’s motion and instead, because the motion sought payment of compensation pursuant to a final Commission award, Section 19(g) dictates the action be brought in circuit court.

The appellate court began its analysis by reiterating that the Commission lacks the inherent power of a court; therefore, when the Commission acts outside its specific statutory boundaries, it acts without jurisdiction. Next, noting neither party filed a review of the underlying contract, the court observed the settlement contract constituted a final award under the Act. The court then emphasized the Act does not grant the Commission the authority to enforce a final award:

Under the Act, the Commission has no power to enforce payment of its own award. (Citation omitted). Rather, the only method to enforce a final award of the Commission is in the circuit court pursuant to section 19(g) of the Act (820 ILCS 305/19(g) (West 2012)). Aper v. National Union Electric Corp., 165 Ill. App. 3d 482, 483 (1988) (noting that section 19(g) serves to “provide a recipient of compensation a method of enforcing its award, because the *** Commission *** has no power to do so”); see also Smith, 11 Ill. App. 3d at 110. Millennium Knickerbocker, 2017 IL App (1st) 161027WC, ¶22 (Emphasis added).

The court then turned to Section 19(g) which states, in relevant part, “either party may present a certified copy of the award of the Arbitrator, or a certified copy of the decision of the Commission when the same has become final…providing for the payment of compensation according to this Act, to the Circuit Court of the county in which such accident occurred or either of the parties are residents, whereupon the court shall enter a judgment in accordance therewith.” 820 ILCS 305/19(g). After discussing the purposes of and defenses to a Section 19(g) application, the court held, “a section 19(g) proceeding in the circuit court is the proper venue for claimant to seek enforcement of the settlement contract, which constitutes a final award of the Commission.” Millennium Knickerbocker, 2017 IL App (1st) 161027WC, ¶24. In so doing, the court detailed the parties’ dispute was only amenable to resolution via Section 19(g):

As noted earlier, in his April 2, 2014, “Motion to Enforce Contract and Penalties,” claimant asserted that although the settlement contract specifically stated that respondent had paid “all medical bills,” there remained outstanding unpaid bills and respondent had “refused to honor the [settlement] contract and pay his outstanding medical bills.” Respondent disputed claimant’s interpretation of the settlement contract and argued that it did not owe payment for the medical bills in question. In other words, the parties’ dispute does not involve review as to whether claimant was entitled to an award under the Act or an interpretation of the Act itself. Rather, it centers on whether the award set forth in the settlement contract had been paid in full. Only the circuit court, pursuant to section 19(g) of the Act, has jurisdiction to make that determination. Moreover, if necessary, the court may hold an evidentiary hearing to resolve the parties’ dispute. Millennium Knickerbocker, 2017 IL App (1st) 161027WC, ¶24 (Emphasis added).

Turning to the petitioner’s penalties petition, the court discussed its decision in Loyola University of Chicago v. Illinois Workers’ Compensation Commission, 2015 IL App (1st) 130984WC. The court observed the Commission is authorized to assess penalties and attorney fees against a party who fails to comply with the terms of a final settlement contract approved by the Commission, and further noted that in Loyola University of Chicago it had stated the Commission could not decide if the assessment of penalties and attorney fees was proper without first interpreting the terms of the settlement contract to determine if the respondent was liable for the reimbursement amount. The court then continued:

Although the claimant in Loyola University of Chicago appears to have filed a combined motion seeking penalties and the enforcement of the underlying award, we did not directly address in that case whether the Commission had jurisdiction to enforce an award. Had we addressed that matter, we would have concluded that the Commission lacked jurisdiction to do so. Thus, to the extent that Loyola University of Chicago may be interpreted as implicitly endorsing a procedure whereby a party may seek before the Commission the enforcement of a final award in conjunction with a petition for attorney fees and penalties pursuant to sections 16, 19(k), and 19(l) of the Act, we decline to follow it. Millennium Knickerbocker, 2017 IL App (1st) 161027WC, ¶29 (Emphasis added).

Returning to the facts therein, the court observed the petitioner’s motion was a combined motion seeking two distinct types of relief: 1) an order requiring the respondent to pay the medical expenses, and 2) imposition of penalties and fees. The court concluded “the Commission clearly lacked the authority to enforce its final award” and vacated the Commission’s order requiring the respondent to pay claimant’s pending medical expenses. Next, noting that although the Commission had jurisdiction to address the portion of the combined motion requesting penalties and attorney fees, the court found the petitioner abandoned his request for such relief at the hearing and vacated the Commission’s order awarding penalties and attorney fees.

Impact on Illinois Employers: The court reaffirmed its interpretation of Section 19(g)’s rather unambiguous language: only the circuit court has jurisdiction to enforce final Commission awards. The court also expressed its disfavor for a party attempting to circumvent Section 19(g) by piggybacking an enforcement action on a petition for penalties and fees before the Commission.